While the bear market has sparked layoffs at some firms, a survey conducted by CoinDesk found that many companies find the slowdown to be a blessing.
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Bitcoin Upstart Bread Cooks Up $15M Amid Crypto Winter
ConsenSys, ShapeShift, Bitmain, and Huobi are among the notable crypto upstarts that have announced layoffs in recent weeks, citing bids to extend their financial runways. However, other Bitcoin-friendly companies have bolstered their war chests through other mediums, accentuating that venture investors haven’t shirked away from this budding sector. Far from, in fact.
Related Reading: Legendary Venture Capitalist: “We’re Close to a Crypto Nuclear Winter”
Crypto Firm Bread Scores M In Series B Round
Per an exclusive report from crypto-friendly media portal TechCrunch, Bread, a cryptocurrency wallet provider that sold million worth of BRD tokens within 216 seconds in late-2017, has raised million in a Series B round. The outlet claims that this influx of funding came from SBI Crypto Investment, a venture arm of Japanese financial services firm SBI Holdings. Fittingly, this million will be used to bolster Bread’s influence and reputation in Japan and broader Asia, along with the team’s engineering staff.
Upstart chief executive Adam Traidman, formerly of NASA’s Jet Propulsion Laboratory, remarked in a company-signed statement:
“The new investment will ensure our long-term global growth, and we are incredibly excited about collaborating with SBI as a strategic investor and business partner to make that happen.”
It is important to note that “global growth” wasn’t Traidman’s attempt to bolster his company’s bottom line, but rather, a fact. In fact, the firm finished the year with 1.8 million global users, who collectively store billion worth of Bitcoin, Ethereum, among other digital assets on the platform.
Interestingly, SBI Holdings’ financial involvement in Bread comes after reports arose that an affiliate of the Japanese firm would be launching its own proprietary wallet offering. Per previous reports from NewsBTC, SBI Group-linked VCTRADE unveiled plans to launch a high-security custodial digital asset wallet in October. VCTRADE revealed that it had enlisted the technology of Sepior, a cybersecurity firm, to bolster its wallet service through multiparty computation (MPC).
The closure of this octuple-digit funding round comes after reports arose that both 1confirmation and Galaxy Digital, two crypto firms focused on investment, purportedly began funding rounds for million and 0 million respectively.
2019 looks bright for crypto funding, but will venture capitalists, Wall Streeters, and high net-worth individuals bite?
Mobile Bitcoin Wallet Game Heats Up
Bread’s newly-lined pockets come as rumors arose that Samsung, the Seoul-based tech conglomerate that has become a smartphone giant, has plans to integrate a “Blockchain KeyStore” (it’s a crypto wallet) into its Galaxy S10 flagship. This simple integration, which purportedly comes preloaded on all S10 devices, could allow Samsung to take over the hegemony that Bread, Coinbase, and other infrastructure providers have held over the crypto wallet subsector.
Whether Bread or Samsung succeeds, Spencer Chen, the vice president of global marketing of the former firm, was adamant that a need for a single, global currency, like Bitcoin, still exists. Yet, Chen made it clear that the demise of cryptocurrencies during 2018 was a byproduct of hype, drawing attention to the mass of “fast-money, traders, and speculators” that flocked to this space en-masse to turn a quick buck. The Bread executive even added that his as his firm has a proclivity to stay committed to the “core mission of crypto,” it was “nothing more than frustrating” to see industry participants take notable steps backward in 2018.
Then again, Chen made it clear that “money that work[s] just like the open internet” is crypto’s viable, long-term raison d’etre.
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Will Crypto Exchanges be Able to Survive The Brutal Crypto Winter?
Only the fittest will survive, or so the saying goes. This mantra does not only apply to the animal kingdom, it works in the business world also and surviving is what a lot of crypto exchanges and companies are struggling to do as the bear market enters its second year.
Global Expansion Success For Huobi
The larger crypto exchanges have a better chance of weathering the storm. Downsizing may be inevitable but their large client base should keep them afloat until the crypto winter abates and markets turn around again. Huobi is one of the big players but it has gone from awarding its senior executives multi-million dollar bonuses in Bitcoin to axing staff a year later.
According to the SCMP Beijing based Huobi Group is still turning a profit despite trade volume shrinking to a tenth of what it was a year ago. CEO of Huobi Global, Livio Weng Xiaoqi, said that transaction fees make up the bulk of profits adding; “We do not know how long the bear market will last, so it is still possible that we will struggle to survive. We have to plan in advance and spend money carefully.”
Huobi’s daily trade volume was well over two billion dollars a year ago, today it has shrunk to just 8 million according to Coinmarketcap. Reported volumes on exchanges vary hugely though so all figures must be eyed warily. What is indisputable though is that volumes and profits are way down along with crypto markets themselves.
Venture funding and news aggregation are loss leaders for Huobi and this is where it is making cuts while still expanding its core business. Weng added that the recent closure of its Shenzhen research subsidiary and downsizing of its Huobi Info news app has resulted in the loss of around 100 positions. Huobi still employs over 1,300 people globally however and was the top crypto exchange at one point.
Huobi’s success is its global reach, with over 70% of its customers being Chinese who live outside of China, or use VPN’s, it has access to a huge and growing market. “Our greatest advantage over competitors is that we have licenses in all major countries – we are the only one among top global exchanges,” Weng added.
Conversely Binance has pulled out of Japan and will not deal with the US due to increasing regulatory pressure a less than positive stance from the government. Huobi has operations in both of these countries and Europe where crypto to fiat trading licenses have been obtained. Its key to survival at the moment is the predominantly Asian client base which is still very hungry for crypto in spite of the ever present bears.
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Bitcoin Upstart BlockEx Shivers In Extended Crypto Winter
While 2019, the purported year that the Bitcoin ecosystem would undergo a turnaround, is in full swing, crypto startups have continued to fall on bad times. Most recently, a London-based, multi-faceted company revealed that “staff reductions” had taken place, likely catalyzed by the tumult in crypto markets.
Related Reading: Legendary Venture Capitalist: “We’re Close to a Crypto Nuclear Winter”
Bitcoin Exchange BlockEx Purges Staff In “Reduction”
As Bitcoin peaked at ,000, BlockEx, a London-headquartered upstart with visions of grandeur, launched its token sale. BlockEx was marketed as a platform for issuing tokens, but, the firm quickly broadened its horizons to facilitating crypto asset exchange. And, in an ecosystem often filled to brim with uninspired products, BlockEx’s ambitions caught on. In the months that followed, the company secured over million for its DAXY token, which would give holders special access to some of BlockEx’s offerings.
Yet, in a comment given to CoinDesk, chief executive Adam Leonard divulged that “staff reductions” had occurred at his firm. Divulging the rationale behind this business decision, Leonard explained that the cuts were mandated to extend BlockEx’s financial runway, especially as some of the firm’s ventures have begun to wind down and/or lose steam. Yet, he remained optimistic, noting that his company has some good news to tout in coming weeks.
Not The First, Nor The Last
As hinted at earlier, BlockEx’s “staff reduction” is yet another crypto firm that has had to make tough decisions, especially amid this Bitcoin rout, rife with volatility and so-called “choppy waters,” as recently put by Pantera’s Joey Krug.
Just last week, per previous reports from NewsBTC, Blockfolio, the company behind a world-renowned crypto-related mobile application, revealed that it too made cuts. More specifically, in an interview with The Block, chief executive Edward Moncada noted that it had cut four employees, reducing its headcount to 37. Moncada also confirmed that Blockfolio would be putting Datablock, an affiliated venture focused on providing data rights for consumers, on the proverbial backburner.
Days prior to the Blockfolio news, Erik Voorhees, dubbed “Bitcoin’s last gunslinger” by Forbes’ Crypto team, took to his company’s blog to reveal that ShapeShift, the startup behind an exchange that shares its name, CoinCap, and KeepKey, laid off 37 employees — one-third of the startup’s team.
Weeks earlier, Bitmain, one of the world’s most valuable crypto companies, saw its insiders claim that the firm would be shutting down its mining operations, cutting upwards to 1,350 employees (half) in the process. Per sources, Beijing-based conglomerate will also be losing its co-CEOs.
Dovey Wan, a pro-Bitcoin partner at Primitive Capital and Chinese crypto insider, explained in late-December that she expected for more layoffs to arrive after 2018’s holiday season. In a tweet, centered around Bitmain’s ongoing qualms, Wan explained that once the “employment and human resources cycle kicks in,” other industry upstarts will begin to purge under-performing/costly staffers.
And interestingly, as made apparent by the BlockEx imbroglio, her quip came true. Considering her comment, BlockEx’s situation isn’t likely to be the last of its kind. But what firm will be on the chopping block next?
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Record US Government Shutdown Prolongs Crypto Winter
If things were not bad enough in crypto land the US government is adding to its woes. The longest shutdown in history is taking its toll on the economy, innovation and the crypto industry.
The Waiting Game Continues
Regulators are no friends of those in the blockchain and crypto industries but they have come to accept that some form of regulation is necessary for the nascent ecosystem to flourish. As observed by the MIT Technology Review this prolonged shutdown is delaying vital decisions that could make a huge difference to crypto markets.
The shuttering of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) for a record fourth week has hampered the launches of key crypto products and services. The most prominent one is the NYSE owned Bakkt crypto asset exchange which was originally set to launch on January 24.
The company failed to secure approval before the shutdown began on December 22 so it is now in a holding pattern awaiting action from government regulators to open a 30 day public comment period. Bakkt has not been sitting around though and has recently announced the acquisition of assets from Rosenthal Collins Group (RCG) to power its back office.
CEO Kelly Loeffler acknowledged the delays in her end of year article stating “Clearing firms and customers have continued to join us as we work toward CFTC approval. We made great progress in December, and we’ll continue to onboard customers as we await the ‘green light.’”
Bakkt is not the only company in the queue, others are also in a state of suspense including trading platform ErisX which has successfully raised .5 million. The futures market and clearinghouse is currently waiting for staff at the CFTC to return to their offices. CEO Thomas Chippas spoke to CoinDesk, stating:
“ErisX’s interaction with the CFTC has been both positive and productive. During this government shutdown we have continued our platform development efforts. We look forward to this current impasse being resolved and re-engaging with staff on our DCO [derivatives clearing organization] application.”
Hands are tied at the moment as the bears keep eating away at crypto markets. According to the New York Times the record breaking shutdown could send the US economy into a contraction. It added that the White House is showing no signs of relenting, blaming the Democrats for economic damage as the standoff over Trump’s border wall continues. An estimated 800,000 federal employees are currently twiddling thumbs while crypto, innovation and the wider economy continues to suffer.
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Web 3.0s Crypto Winter Mission Keep Our Heads Above the Hype
Despite the gloomy narratives, 2018 was hugely productive for teams building the decentralized web, says Parity’s Jutta Steiner.
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How to Last the Crypto Winter Seek Simplicity, Manage Complexity
Decred’s Jake Yocom-Piatt explains in this exclusive op-ed why he thinks information asymmetry is a key factor driving the manic buying and panic selling cycles in the crypto markets.
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Huobi Chain Releases Whitepaper Amid “Crypto Winter”
While 2018 has undoubtedly slowed the crypto industry’s progress, a number of startups have forged ahead in their development efforts. And just weeks after Binance released a sneak peek of its in-house blockchain, which is currently centered around a low fee, near-instant, and scalable decentralized exchange, so has Huobi.
Related Reading: Zhao: Binance Chain to Be Ready in “Months,” Enabling Projects to Issue Tokens
Huobi Drops Whitepaper For In-House Blockchain
On Saturday, the Huobi exchange’s overarching brand released a press release via PRNewswire, which outlined an English whitepaper for Huobi Chain, the company’s first foray into native blockchain development. The 79-page whitepaper, which was distributed in tandem with the release, highlighted the Chain team’s intentions and ambitions for the project. Although the paper was extensive, it was made clear that this venture’s overarching goal is to settle asset transactions “on the premise of transparency and regulation.”
To accomplish this (somewhat nebulous) vision, Huobi has enlisted a Delegated Proof of Stake (DPoS) consensus model, which purportedly facilitates Byzantine Fault Tolerance. DPoS, for those who are unaware, is a consensus mechanism that allows users to allocate tokens to a predetermined number of delegates (nodes), who both generate interest and secure the network.
Commenting on the platform as a whole, Livio Weng, CEO of Huobi Global, remarked:
“This is just one more way that Huobi is seeking to improve the global digital asset and blockchain community. Once launched, Huobi Chain will offer users a variety of benefits, including security, transparency, fast, scalability, and smart contract capability.”
As stipulated by the roadmap contained in the whitepaper, a preliminary version of the blockchain could go live in Q4 2019. And while this timeline seems underwhelming, the press released maintained that Huobi’s developers, coupled with “industry experts,” are expected to make “significant progress” on the project over 2019.
This subsidiary was first publicly divulged in June, which was when Huobi’s Gordon Chen told the South China Morning Post that Chain’s vision is to turn Huobi into a decentralized autonomous organization.
Crypto Winter Freezes Huobi
Interestingly, this press release was dropped just days after a company spokeswoman confirmed that Huobi was “optimizing” its purported 1,000+ employees.
As reported by NewsBTC previously, Dovey Wan, the founding partner at Primitive and a crypto insider, claimed that Huobi’s “high % headcount cut” was a byproduct of overextension in 2017/early-2018. She claimed that Huobi flew too close to the Sun with its expansion efforts, along with its leading customer support team for “VIP customers.” And as such, Wan claimed that the startup created an “exam” to determine which employees to keep on payroll.
Huobi representatives have yet to divulge the extent of the layoffs, nor who/what company branches were cut, trimmed, or kept in full.
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Bitcoin Lightning Network Booms Amid “Crypto Winter”
Since Bitcoin’s earliest blocks, the network’s lead developers have been hard at work attempting to scale the world’s first blockchain. And while 2018’s “crypto winter” has deterred a multitude of startups, developers, and key industry participants, the Bitcoin Lightning Network, the first viable second-layer scaling solution, has continued to see monumental growth.
Bitcoin Lightning Network To Breach 500 BTC Network Capacity
Rui Gomes, a developer at Tim Draper-backed OpenNode, recently took to Twitter to exclaim that the Lightning Network, an off-chain system that facilitates instant, low-cost, scalable Bitcoin transactions, has grown at a “staggering pace.” More specifically, Gomes, whose brainchild is a preeminent Lightning App (LApp), revealed that the network will facilitate 500 BTC in a few days’ time.
The Lightning Network just hit 500 BTC in network capacity. The network keeps growing at a staggering pace
Start running your own node and open channels while on chain fees are low before the next bull market.
Enjoy private bitcoin transactions settled instantly
pic.twitter.com/Vw3raOj7nw
— Rui Gomes (@ruigomeseu) December 21, 2018
This statistic was corroborated by 1ML, a Lightning Network analytics provider. Per 1ML’s real-time statistics, node channels supporting the scaling protocol, headed by Bitcoin development consortium Blockstream, can now accept 496.49 BTC, a sum that amounts to .93 million at current prices. And by the looks of it, this figure is only slated to swell in the months to come. In the past month, network capacity has increased by 13%, even as the crypto market en bloc has remained in a troubled, chaotic state.
Not Any Old Show Pony
And frankly, the Lightning Network isn’t any old show pony.
Crypto Graffiti, a well-known, yet pseudonymous artist situated in the cryptosphere, recently took to Reddit to tell a jaw-dropping story. Crypto Graffiti, who has applied his/her artistic prowess to the Bitcoin realm, noted that on Thursday, he/she auctioned a micro-painting depicting a black swan (a likely nod to crypto’s classification on the global stage) on the Lightning Network.
The artist noted that the piece was sold to the lowest bid, specifically to promote the second-layer protocol and “poke fun at [mainstream media’s] focus on Bitcoin’s price.” For those who are wondering, the piece left Crypto Graffiti’s hands for one-millionth of a Satoshi, currently valued at .000000037.
While this little initiative was seemingly done in jest, the crypto-friendly artist explained that micropayments, arguably the Lightning Network’s killer use case, have been an integral part of his/her life. Crypto Graffiti wrote:
“I’m excited about a future where micropayments are omnipresent. Artists paid by the view…writers by the poem…musicians by the listen. Every day interactions complemented by positive monetary reinforcement such as tipping someone who let you merge into traffic. Hopefully this micro auction inspires others to think big about the future of Bitcoin.”
It is important to note that the crusade for scalable networks hasn’t gone unnoticed. Speaking with Bloomberg, Joey Krug, an Augur co-founder turned Pantera Capital top brass, explained that a lack of scaling solutions is directly holding back crypto assets. The Pantera executive noted that if current blockchain networks can scale, cryptocurrencies en-masse will be able to undergo their next round of exponential, jaw-dropping growth.
Related Reading: Pantera Exec: Crypto Market Close to Bottom, Tenfold Increase Possible With Scalability
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Number of Crypto ATMs Steadily Growing Amid Crypto Winter, Data Shows
n In November, 209 new crypto ATMs were installed and 68 more closed, showing how the industry is steadily developing amid the market declinen
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